Biz Extra
Published: September 26, 2022 | Updated: 27th September 2022
Chancellor Kwasi Kwarteng announced a cut in Stamp Duty Land Tax (SDLT) in his emergency ‘mini-budget’ on September 23.
But what does this mean for homebuyers, first-time buyers and those in the middle of a transaction?
Here we get the expert view of Frettens Solicitors’ Conveyancing Partner Clare Hallett on what the cut in stamp duty is and what it means for you…
Chancellor Kwasi Kwarteng said the stamp duty reduction aims to “support growth, increase confidence and help families aspiring to own their own home”.
The cuts unveiled are as follows:
The Chancellor said: “The steps we have taken today, mean that 200,000 more people will be taken out of paying stamp duty altogether. This is a permanent cut to stamp duty effective from today.”
Clare said: “Given the increase in property values I think the increase in the nil rate band is long overdue.
“The announcement that it is permanent will also be a huge relief to both the public and conveyancers!”
The cut means that homebuyers will no longer pay stamp duty on the first £250,000 of a property’s purchase price.
This will obviously have a positive impact on a large number of homebuyers.
Clare said: “Whilst the cut in the nil rate band will be welcome, interest rates are rising and thus mortgages are more expensive. We need some stability and measured and sustainable growth in the property market. Whether the measures announced, alone, will achieve that remains to be seen.”
The stamp duty cut, again, will likely have a big positive impact on the majority of first-time buyers.
First-time buyers who are buying a home for £425,000 or less are now exempt from paying stamp duty land tax.
And first-time buyers will now be able to claim relief on homes worth up to £625,000.
Read more on stamp duty exemptions for first-time buyers here.
Or, you can read our full purchaser’s guide for first-time buyers here.
Anything which completed on September 23, and onwards, will have the benefit of these cuts, which are permanent.
Sadly, if you completed on September 22 then you cannot reclaim any of the tax that you have paid.
Criticism of the stamp duty cut soon started, with Shadow Chancellor of the Exchequer, Rachel Reeves, questioning the benefits of the reduction:
She said: “It’ll take much more than a stamp duty cut to get our country back on track, and home ownership back to the levels last seen under a Labour government…
“Last time the government did it (a stamp duty cut), a third of the people who benefited bought a second home or a buy to let property…”
“Is that really the best use of taxpayers’ money, when borrowing and debt is already so high?”
Clare said: “Raising the nil rate band is long overdue and will mean that some pay no SDLT at all, and others pay less than they would have.
“We are working hard to make sure that we can implement the changes quickly for our clients, particularly those that have exchanged and not yet completed and who will benefit from the announcement.”
If, following this stamp duty announcement, you are keen, like many will be, to get the ball rolling in purchasing a home, Frettens will be happy to discuss your options with you.
Its bright and experienced team can assist you in the purchase of your home, whether you’re a first-time buyer or simply a homebuyer.
To get in touch, call the firm on 01202 499255 or fill out the form on its website. Frettens offers a free initial chat for all new clients.
If you’re not ready to chat, and want to learn more, you can read Frettens’ complete guide to purchasing a home here.
